The Ultimate Guide to Buying Gold

Introduction

Many people see investing in gold as an enticing alternative to stocks and bonds. This is because gold is considered a safe-haven asset, an asset whose value is likely to remain steady if the market fluctuates.

But, as with any other investment, you need to do your research before you commit to investing in gold. In this guide, we’ll cover what you need to consider and avoid when buying gold, and what to look for when selecting a gold investment company.

What to Consider When Buying Gold

When investing in gold, first consider how you’re going to buy it. There are different ways to own gold, each with its own risks and benefits. Let’s dive into the five common ways of investing in gold.

Gold bullion

Gold bullion generally means bars/ingots (and some coins) of high purity used for investment. You can purchase gold bullion through an online dealer, a local dealer, or a collector.

While owning gold in physical form can provide a lot of emotional satisfaction, you’ll need to find a place to safely store it, and you’ll also need to insure it.

When selling gold bullion, you’ll need to find someone willing to purchase whatever size bar you own. That said, many investors find this form of gold investing highly rewarding, even if it takes some extra time to lock in a purchaser.

Gold coins or jewelry

Investing in gold coins or jewelry can give you the emotional satisfaction of owning physical gold. It’s slightly more convenient than purchasing gold bullion, too. Coins and jewelry are smaller than bullion, and you can purchase them in smaller quantities.

While it is not typically considered an investment vehicle, gold jewelry has utility in that you can wear it until you’re ready to sell.

Gold futures

COMEX Gold (GC, 100 oz) and Micro Gold (MGC, 10 oz) futures are physically settled contracts. Most investors close or roll positions before delivery. Gains/losses are realized daily through mark‑to‑market and margining; falling below maintenance margin can trigger a margin call or liquidation. Futures are complex and can amplify losses.

Gold ETFs, mutual funds, and IRAs

Gold exchange-traded funds (ETFs) and mutual funds are accounts that buy gold on behalf of an investor. The shares that make up the funds represent a certain amount of gold, and you can buy and sell them like stocks. This is one of the best ways to buy gold, as ETFs and mutual funds allow you to work with gold without the effort or cost of physical ownership.

Many ETFs and mutual funds invest in other commodities in addition to gold, so you may have trouble finding a firm that strictly deals with gold. However, this can be beneficial for diversifying your investment portfolio.

Another option is to invest in a gold IRA, or individual retirement account, which allows you to transfer part of your individual retirement account into gold and precious metals investments. A gold IRA is an IRS-approved retirement account that operates just like a regular IRA and comes with the same tax-deferment benefits. It is important to note that home storage is not permitted.

Gold mining companies and stocks

Mining shares can benefit from rising gold, but they carry equity, operational, and jurisdiction risks and do not track bullion 1:1. Many investors treat them as stocks with commodity sensitivity, not as a direct substitute for metal.

What to Avoid When Investing in Gold

While gold can be a lucrative investment, there are a few things you should avoid when investing in gold. Here’s what to keep in mind.

Over‑ or under‑allocating

Some evidence suggests portfolios can benefit from roughly 2–10% strategic gold exposure depending on overall risk and objectives. Avoid rigid rules; size your allocation based on your plan and tolerance.

Hiring inadequate storage

If you choose vault storage, prefer providers recognized in professional markets (e.g., LBMA vaulting standards; CME/COMEX‑approved depositories). Confirm allocated/segregated storage options and insurance coverage in writing.

Paying far above spot

Physical products trade at premiums over the spot price to cover minting, distribution, and dealer costs. Bars typically carry lower premiums; popular coins often cost more and can rise further in tight markets. Compare multiple reputable dealers rather than relying on a fixed cap.

Buying as a short-term investment

Gold is generally more stable than other asset classes, and it can be a valuable hedge against inflation, but its value does fluctuate. Investing in gold with the hope of making short-term gains may not pay off, as gold usually performs best in the long term.

Treating gold as a short‑term trade

Gold’s role is clearest over multi‑year horizons for diversification and purchasing‑power preservation. Short‑term moves can be sharp in either direction. Consider dollar‑cost averaging instead of timing.

How to Pick the Best Gold Investment Company

Another thing to consider when buying gold is which gold investment company you’re going to work with, or which retailer you’re going to purchase from. Gold investment companies are different from physical gold retailers, but no matter which route you take when investing in gold, you’ll want to pick a company or retailer that feels right for you.

If you’re interested in buying gold coins, you can do so through pawn shops, individual sellers, or online retailers. As always, do your research to ensure the dealer is reputable. You can purchase gold jewelry through a jewelry store or pawn shop, but again, make sure to do your research to determine the company’s reputability.

When purchasing physical gold, you’ll also want to look into storage options. With pawn shops and some online retailers, you’ll need to find your own storage facility. However, some retailers offer physical storage that comes with insurance, though this is an additional fee.

Otherwise, if you’re looking to set up a gold IRA, you’ll need to work with a gold investment company. Here’s what to keep in mind when deciding which gold investment company is best for you.

Fees and expenses

Some gold investment companies have extra charges, such as annual maintenance charges, depository charges, and tax deductions. We recommend looking for companies that are upfront about any extra charges, and double-checking paperwork before opening your account.

Before purchasing, you’ll also want to look into the current price of gold and its projected prices to make sure you’re getting a good deal. We recommend checking inflation rates, too, as gold prices are usually higher during times of inflation.

Stability and earnings increase

We also suggest looking into a gold investment company’s net income growth over time when deciding which company to pick. Even if the company hasn’t made spectacular gains, steady growth could be a sign they’re a reputable firm.

It’s normal for a company’s shares to lose value sometimes (especially in times of economic struggle), but if there’s a lot of fluctuation in its growth, that may be a sign the company isn’t for you.

Holdings

Lastly, we recommend looking at the holdings of the gold investment company so you can determine how much it holds in physical metals. This will also clue you in on how much of the holdings aren’t in precious metals, so you can evaluate whether the company meets your personal criteria for investments.

Conclusion

Investing in gold can be a great way to hedge against inflation and add diversity to your investment portfolio. To get started, determine what kind gold investment you’d like to make, whether it be gold bullion, jewelry, coins, ETFs, mutual funds, or a gold IRA.

After you consider the pros and cons of each, watch out for some pitfalls—such as buying too much or too little, or paying too much above the spot price of gold. Then, before making your actual investment, research the company you’re working with or the dealer you’re purchasing from, so your long-term gold investment can be worthwhile.